State Board penalizes ETS $3.1 million for late test scores

November 4, 2015

November 4, 2015

Update: This article was updated on Nov. 4 to include action by the State Board of Education.

The State Board of Education on Wednesday voted to penalize the Educational Testing Service, the company administering the state’s standardized testing program, $3.1 million for delivering the scores and reports on the new Smarter Balanced tests late. The state board approved the recommendation of the California Department of Education after little discussion and two comments from the public.

The penalty equals about 4 percent of the $83 million contract that the state signed with ETS for 2014-15. The company can ask the board to reconsider the penalty if it has evidence that its actions didn’t cause the breach of contract. ETS has not commented on the penalty.

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Last spring, ETS oversaw the new online tests aligned to the Common Core State Standards in math and English language arts for about 3 million students in grades 3 through 8 and grade 11. Districts reported that the administration overall went well, with few serious technical glitches among more than 1,000 districts and charter schools.

However, ETS was late in providing districts with paper copies of individual student reports for mailing home to parents within eight weeks of the completion of testing, which occurred in most districts in mid-June, according to a report in the November state board agenda. It was also late in completing a small percentage of scores to districts, which in turn held up the release of the final data file of the statewide results to the Department of Education,

The department had planned to release the statewide results in early August. That deadline was pushed back a month. Reports to parents weren’t mailed out until well into September, in some cases too late for discussions with parents on Back to School nights.

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Lee Angela Reid, representing the Association of California School Administrators, told the state board that the late results “created confusion at the local level” and a perception among parents of a lack of transparency. School districts were wrongly blamed for the problem, she said.

Stating that he backed the proposed penalty, Doug McRae, a retired executive from Monterey who oversaw K-12 standardized tests and has closely watched rollout of the Smarter Balanced tests, said, “It’s been standard operating procedure in the industry to penalize a contractor for not making deadlines for returning results.”

Keric Ashley, deputy superintendent of Public Instruction, told the board that he has discussed the problems with ETS and is confident that the company will meet the contract’s deadlines next year. He said that he expects the department will release the statewide results from the spring 2016 testing for every school and district in mid to late August next year. ETS’ contract for next year calls for submitting the students’ scores to districts within four weeks, so that teachers can review the results before the start of school.

Under the terms of the contract, the state was obligated to pay 90 percent of ETS’ charges as they are billed, but could withhold 10 percent – $8.3 million – until the work was completed. Then the department would verify that ETS met the conditions of the contract. The Department of Education proposes to pay $5.2 million of the remaining money but not $3.1 million because of the contract violations.

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KDW3 years ago3 years ago

OK ... so this was last year. But this year (2016), my Santa Clara County District will not be receiving their score reports until Sept. 15th and then has 20 days to mail them out, so we won't know how our kids did until almost 2 months into the school year. Why are we not filing suit this year as well? Why does a digital test take so long to score and … Read More

OK … so this was last year. But this year (2016), my Santa Clara County District will not be receiving their score reports until Sept. 15th and then has 20 days to mail them out, so we won’t know how our kids did until almost 2 months into the school year. Why are we not filing suit this year as well? Why does a digital test take so long to score and disseminate results. Isn’t the benefit of an online test the immediacy of the data? It feels like these things had to be scored by hand. What is the hold up?

Maritess Simmons3 years ago3 years ago

The State Board of Education has a fiduciary responsibility when dealing with public funds, do they not? Seems to me the answer should not be up for debate, it’s in the contractual agreement. I hope they/we don’t waste any more time/money “deciding” this.

John Fensterwald3 years ago3 years ago

The State Board has the final say and will take up the issue next week. The recommended $3.1 million penalty is a staff recommendation. ETS does have the right to make its case, perhaps that circumstances out of its control led to the late delivery. ETS hasn’t commented publicly at this point.

Zeev Wurman3 years ago3 years ago

I would add that SBAC results as reported on the CDE web site are still incomplete and erroneous. A note on some results says they will be updated in October, yet here we are 4 days before the end of the month and no update so far.
Seems as if CDE messed up districts with large number of opt outs. For example, for Palo Alto grade 11 ELA CDE reports 326 tested out of 525 (for … Read More

I would add that SBAC results as reported on the CDE web site are still incomplete and erroneous. A note on some results says they will be updated in October, yet here we are 4 days before the end of the month and no update so far.

Seems as if CDE messed up districts with large number of opt outs. For example, for Palo Alto grade 11 ELA CDE reports 326 tested out of 525 (for 62.1% participation) while the actual grade 11 enrollment was 990. For math it was 378 out of 525 for 72%.

In Palos Verdes the enrollment is also over 1000 students in grade 11, yet CDE reports (without warning of partial results as for Palo Alto) 720 (ELA) and 677 (Math) tested out of 795 enrolled, for 91% and 85% respectively. Yet if we use the full enrollment figure of 1081 (as reported for 10th grade CAHSEE in 2014) the participation dives to 67% and 63% respectively. So, unless over a quarter of the cohort disappeared overnight, CDE numbers are lowballing opt-outs.

Doug McRae3 years ago3 years ago

The recommended $3.1 million penalty for ETS for late delivery of spring 2015 CAASPP scores and student reports is noteworthy, but the bigger story is estimated cost overruns for an estimated $17 million for the $83 million ETS contract. The details are that the $83.4 million contract limits payment to ETS to $75.8 million from the 2014-15 fiscal year budget [OK, $75,819,073 to be exact] plus $7.6 million from the 2015-16 fiscal year budget for … Read More

The recommended $3.1 million penalty for ETS for late delivery of spring 2015 CAASPP scores and student reports is noteworthy, but the bigger story is estimated cost overruns for an estimated $17 million for the $83 million ETS contract. The details are that the $83.4 million contract limits payment to ETS to $75.8 million from the 2014-15 fiscal year budget [OK, $75,819,073 to be exact] plus $7.6 million from the 2015-16 fiscal year budget for work after July 1, 2015 to complete scoring and reporting tasks. The ETS invoices for work through May came to exactly $75,819,073, and likely did not include some work done at the end of May. ETS did not invoice for work done all of June, and late May / June is a heavy duty costly time for scoring for a spring testing program. I’d estimate that ETS has not been paid about $15 million for end-of-May and all-of-June work actually performed. With the late scoring, late release of statewide aggregate data, and late release of printed student reports through August and September, I’d estimate the $7.6 million in the 2015-16 fiscal year budget will also have cost overruns to the tune of several million dollars, bringing the total cost overrun estimate to about $17 million.

How will this estimated $17 million in cost overruns for CAASPP 2015 be resolved? Stay tuned. The above detail on exact budget amounts and approved ETS billings was obtained from CDE in early October via a reply to a Public Records Act request, and I have not received as yet a reply to a follow-up Pub Rec Act request for clarification on whether ETS can be paid in some manner or the other for the 2015 CAASPP cost overruns. In any case, the CA taxpaying public deserves a little transparency on these financial issues — they are germane to the CDE’s long time claim the new Smarter Balanced testing program would cost $26/student vs alternate estimates that the SB program would cost closer to $40/student.

Todd Maddison3 years ago3 years ago

Great research, Doug - thanks.
I don't understand why the state would only be "considering" this penalty. Does the contract not have SLA's, and a penalty structure for failing to meet those SLA's?
I've been involved in a few much smaller contract negotiations, and have never seen one that did not define the expectations and have "remedies" (as they call them in legal language) for failure to perform to the contract.
Why would penalties here … Read More

Great research, Doug – thanks.

I don’t understand why the state would only be “considering” this penalty. Does the contract not have SLA’s, and a penalty structure for failing to meet those SLA’s?

I’ve been involved in a few much smaller contract negotiations, and have never seen one that did not define the expectations and have “remedies” (as they call them in legal language) for failure to perform to the contract.

Why would penalties here be at all discretionary….?

Tom3 years ago3 years ago

Thanks Doug for getting that information from CDE and for sharing with us. So let’s see, ETS was late in their deliverables, and it cost more than their contracted amount. What are the chances that this was a low-bid contract, and that ETS was over-promising to get the work?